When a business reports an asset at an inflated dollar amount, it has violated the measurement issue of:
recognition
valuation
classification
realization
The issue of deciding when to record a transaction is solved by
properly classifying the transaction
deciding on a point of recognition
assigning historical cost to the transaction
analyzing the intent of management
Which of the following accounts is increased with a credit?
Land
Rent Payable
Accounts Receivable
Prepaid Insurance
The double-entry system
requires that each transaction be recorded with multiple debits
requires that the total amount of the debits must never equal the total amount of the credits
is based on the principle of duality
requires that the total credits for each transaction exceed the total debits
The declaration and payment of dividends will
decrease net income
increase liabilities
decrease stockholders' equity
increase stockholders' equity
Is the process of assigning all the transactions in which a business engages to appropriate categories or accounts.
Classification
Valuation
Recognition
None of the above
Refers to the decision as to when to record a business transaction.
none of the above
Recording transactions at the exchange price at the point of recognition is called the:
fair value
cost principle
all of the above
This is prepared periodically and is used to ensure that the total of debits and credits in the accounts are equal, meaning that the accounts balance.
trial balance
balance sheet
adjusted journal entry
statement of retained earnings
Name all of which are on the trial balance:
Assets
Liabilities
OE
Revenues
Expenses
